Follow the Money Trail – London School of Economics (LSE) and Libya

26 02 2011

It is disturbing to be reading foreign policy news this week given the continuous influence that money plays. In this blog, discussion is Money vs. Values.

The case in question is the relationship between London School of Economics (LSE) — an important world-wide-known educational institution, the ruling family of Libyan dictators and indirectly the British strategic interests with this oil producing country.

The three above mentioned players/ issues find themselves at cross-section of so called “capacity building”, the term often used in international development / foreign policy — as to refer to “assistance that is provided to entities/ societies in developing countries, which have a need to develop a certain skill or competence.”

LSE has taken the Libyan dictator’s family grant money from Gadaffi “International Charity and Development Foundation” amounting to no less than 1.5 million pounds to set up its “North Africa Research Centre”  — that is to research human rights, democracy and civil society.  Gadaffi Charity was run by Saif Gaddafi, Gadaffi’s son who is also an LSE graduate.

The LSE grant has been structured by the best minds of LSE, which today comprises 16 Noble prize winners.  Today, this structuring move looks rather like a run-in at the Caesar Palace.  Certainly, these kinds of fund raising moves are guaranteed not to be neither ‘sustainable’ nor are they considered as ‘long-term capacity building’ programs.

In its capacity, LSE has been running training courses for mid-level Libyan civil servants. As we hear it through the grapevine (see previously referenced blog), some of these programs were funded by UK Foreign Office, and the topic of these programs was Public Administration.

At the time of grant acceptance, of the original donation, LSE emphasized that ‘It is quite clear that not only is the donation acceptable, it should be encouraged. This is exactly the kind of organization the School should be associated with – a group struggling for justice under what continues to be, despite reforms, a repressive and brutal regime.’

Now that the dictator is no longer in favor, his money has been/will be frozen, LSE strategically and decidedly severed relations with the grant-or, and hence at the same time has put a fast break on their North African Research Centre.  This is done sadly, at the time when Libya needs capacity building the most.

LSE has indeed been very transparent about its day-to-day activities concerning this matter, informing via press releases about Student Union’s dissatisfaction concerning this matter, and reminding the Student Union about their wide support for the program back in 2009.  Yet another snippet of LSE management’s capacity besides ‘building’ is to play its hand at internal and very ‘defensive’ type of politics with its Student Union.

The grant funding may certainly end up becoming a monetary as well as a political liability for LSE, as students are asking for a conversion of grant money expended into “Scholarship fund for Libyan students.”

Hypo-criticism of educational institutions, usage of everyone and anyone’s grant money primarily as a leverage to expand into the growing emerging markets– comes at a cost.  A real cost is that LSE may get caught up in a political whirlwind — with its reputation, should it still hold value in today’s society, at stake.

While 1.5 million pounds may not a large amount of money for an endowment valued at 72 million pounds, this raises a timely question — when greed enters the doors of our foremost educational institutions — who takes the responsibility?  This incident proves to be a double-edge sword, for education, for LSE, for Libya and for the United Kingdom.

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Own a business? 6 new tax breaks

5 02 2011

http://money.cnn.com/2011/01/17/smallbusiness/small_business_new_tax_credits/index.htm

By Catherine Clifford, staff reporter

January 17, 2011: 12:30 PM ET

NEW YORK (CNNMoney) — Doing your taxes stinks, right? No fun at all. But take note as you brace for your 2010 return: A handful of changes in the tax code could translate into a fatter refund check.

The Small Business Jobs Act, passed last September, and the historic health care reform law, passed in March, enacted hefty credits and deductions for capital investments and employee health insurance costs.

Here is a rundown of six new credits and deductions likely to affect the most small business owners.

Health care tax credit: Small businesses that pay at least half of their employee’s health coverage can get a significant tax refund.

The maximum credit goes to businesses with 10 or fewer full-time employees with annual wages that average $25,000 or less. The break phases out for firms with 25 employees or that pay average wages above $50,000.

For 2010 through 2013, the tax credit covers up to 35% of the money that a qualifying business spends on its health insurance premiums. In 2014, the top tax credit bumps up to 50%.

Tax-exempt organizations can claim 25% in the first time period and 35% after that.

The credit is available for a maximum of six years: 2010 through 2013 and for any two years after that.

Health insurance deduction for self employed: Are you your own boss and paying for your own health insurance?

Normally, you can deduct your insurance costs from your business profits, but you can’t deduct those costs from your self-employment taxes.

But in 2010, the self-employed can deduct their health insurance costs from their business profits for both taxes.

Let’s say Sally, an architect, makes $50,000 in net income and pays $6,000 for health insurance.

In other tax years, Sally would pay income tax on $44,000 and self employment tax on $50,000, explained Karen Brosi, a federally licensed tax professional based in Palo Alto, Calif.

But in 2010, Sally will pay income tax and self employment taxes on $44,000.

Super-charged ‘Section 179’ provision: OK, this one is a little wonky. But it’s worth knowing about.

The extension of “Section 179” of the tax code allows businesses to write off the full amount of qualifying equipment or computer software made in 2010 or 2011, up to $500,000 per business, per year.

What qualifies? Think tractors, robots and equipment. New and used items are eligible but, sorry, buildings aren’t.

Instead of having to deduct your capital expenditures slowly, the temporary change to Section 179 allows businesses to get more cash up front.

Section 179 is specifically targeted to help small business: A business that spends more than $2 million in one year on qualifying capital will not be able to get the full benefit of the Section 179 write-off.

You can only take advantage of the full Section 179 write-off if your small business booked a profit. A Section 179 write-off can not cause your business to “make or increase a loss” for the year, explained Brosi.

Bonus depreciation extension: For 2010, there is an accelerated depreciation schedule: The point is to get cash into the hands of small businesses quickly. Unlike Section 179, you can depreciate items even if your business is in the red for the year.

Bonus depreciation covers new equipment only, and can be taken in addition to a Section 179 write-off, if the item is eligible for both benefits. You can depreciate “tangible property,” like buildings, machinery, vehicles, furniture, and equipment, as well as “intangible property,” such as patents, copyrights and computer software. (Sorry, if you bought a plot of land, that doesn’t qualify.)

Businesses that bought a qualifying item after Sept. 8 can claim 100% of its cost (so long as it is used before Jan. 1, 2012). Businesses that bought such items before Sept. 8 can claim 50% (so long as it is put into service before Jan. 1, 2013).

Depreciation on a business car or truck: Did you buy a new car, van or truck for your business last year? Ka-ching!

For 2010, business owners who buy and use a brand new passenger vehicle will depreciate much more than usual — $11,060 for a car, and $11,160 for a light duty truck or van. That includes an extra $8,000 bonus depreciation, on top of the usual first-year depreciation. If you buy an SUV or heavy pickup, the rules are slightly different, said Brosi.

General Business Credit: If you are one of those unlucky business owners affected by the Alternative Minimum Tax, you might get a little break in 2010.

Boiled down, if you have to calculate your taxes under both the regular tax structure and under the AMT, you pay Uncle Sam whichever one is more. If your taxes calculated normally are $10,000 and $12,000 under the AMT, you owe $12,000.

Usually, general business credits do not apply toward the AMT calculation. But for 2010, deductions included in the “General Business Credit” part of the tax code are also allowable under the AMT. Applying these credits to your AMT will reduce what you owe under the AMT, explained Brosi.

There are a couple dozen credits in this category: Some that might impact small biz include a benefit for hiring someone unemployed, the costs for starting up an employer pension plan or the costs of employer-provided child care services.

“If I am subject to AMT, I don’t lose the benefit of any eligible business credit,” explained Brosi. To top of page





January 2011 Manufacturing ISM Report On Business®

5 02 2011

Link to Report is:

http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942

FOR RELEASE: February 1, 2011

Contact: Rose Marie Goupil
ISM, ROB Media Relations
Tempe, Arizona
800/888-6276, Ext. 3015
E-mail: rgoupil@ism.ws

January 2011 Manufacturing ISM Report On Business®

PMI at 60.8%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report’s information reflects the entire United States, while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of January 2011.

This report reflects the U.S. Department of Commerce’s recently completed annual adjustment to the seasonal factors used to calculate the indexes.

 

New Orders, Production and Employment Growing
Supplier Deliveries Slower
Inventories Growing

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in January for the 18th consecutive month, and the overall economy grew for the 20th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The manufacturing sector grew at a faster rate in January as the PMI registered 60.8 percent, which is its highest level since May 2004 when the index registered 61.4 percent. The continuing strong performance is highlighted as January is also the sixth consecutive month of month-over-month growth in the sector. New orders and production continue to be strong, and employment rose above 60 percent for the first time since May 2004.   Global demand is driving commodity prices higher, particularly for energy, metals and chemicals.”

PERFORMANCE BY INDUSTRY

Of the 18 manufacturing industries, 14 are reporting growth in January, in the following order: Petroleum & Coal Products; Primary Metals; Apparel, Leather & Allied Products; Wood Products; Computer & Electronic Products; Transportation Equipment; Fabricated Metal Products; Machinery; Paper Products; Miscellaneous Manufacturing; Chemical Products; Furniture & Related Products; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components. The four industries reporting contraction in January are: Textile Mills; Printing & Related Support Activities; Plastics & Rubber Products; and Nonmetallic Mineral Products.

WHAT RESPONDENTS ARE SAYING …
  • “Continued weakness in the dollar is having a negative effect on the components we purchase overseas and increasing our material costs.” (Transportation Equipment)
  • “Lead times are increasing significantly, and commodity pricing is starting to increase.” (Chemical Products)
  • “January/February sales will be decent, and we see a strong March. We’re cautiously optimistic but reluctant to hire.” (Fabricated Metal Products)
  • “Business is still slow with no pick-up in sight.” (Furniture & Related Products)
  • “We continue to see unexpected strength in many non-U.S. markets.” (Fabricated Metal Products)
MANUFACTURING AT A GLANCE
JANUARY 2011

Index

Series
Index
January
Series
Index
December
Percentage
Point
Change

Direction

Rate
of
Change
Trend*
(Months)
PMI 60.8 58.5 +2.3 Growing Faster 18
New Orders 67.8 62.0 +5.8 Growing Faster 19
Production 63.5 63.0 +0.5 Growing Faster 20
Employment 61.7 58.9 +2.8 Growing Faster 16
Supplier Deliveries 58.6 56.7 +1.9 Slowing Faster 20
Inventories 52.4 51.8 +0.6 Growing Faster 7
Customers’ Inventories 45.5 40.0 +5.5 Too Low Slower 22
Prices 81.5 72.5 +9.0 Increasing Faster 19
Backlog of Orders 58.0 47.0 +11.0 Growing From Contracting 1
Exports 62.0 54.5 +7.5 Growing Faster 19
Imports 55.0 50.5 +4.5 Growing Faster 17
OVERALL ECONOMY Growing Faster 20
Manufacturing Sector Growing Faster 18

*Number of months moving in current direction.
Indexes reflect newly released seasonal adjustment factors.

 

 

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

Aluminum (5); Aluminum Products; Brass (2); Brass Products; Caustic Soda (6); Chemicals (4); Copper (6); Copper Based Products (3); Corn (5); Corrugated Containers (11); Diesel (2); Freight Rates; Fuel Oils; High Density Polyethylene (2); Lubricants; Nuts; Packaging Materials; PET (2); Plastics; Plastic Products; Plastic Resins (3); Polyethylene Resin; Polypropylene; Soybean Oil (3); Stainless Steel (3); Stainless Steel Products; Steel (5); Steel Products (2); Steel Surcharges; and Sugar.

Commodities Down in Price

No commodities are reported down in price.

Commodities in Short Supply

Electric Components is the only commodity reported in short supply.

Note: The number of consecutive months the commodity is listed is indicated after each item.

 

JANUARY 2011 MANUFACTURING INDEX SUMMARIES

PMI

Manufacturing continued to grow in January as the PMI registered 60.8 percent, an increase of 2.3 percentage points when compared to December’s seasonally adjusted reading of 58.5 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 20th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 18th consecutive month. Ore stated, “The past relationship between the PMI and the overall economy indicates that the PMI for January (60.8 percent) corresponds to a 6.4 percent increase in real gross domestic product (GDP) on an annual basis.”

THE LAST 12 MONTHS
Month PMI Month PMI
Jan 2011 60.8 Jul 2010 55.1
Dec 2010 58.5 Jun 2010 55.3
Nov 2010 58.2 May 2010 57.8
Oct 2010 56.9 Apr 2010 59.6
Sep 2010 55.3 Mar 2010 60.4
Aug 2010 55.2 Feb 2010 57.1
Average for 12 months – 57.5
High – 60.8
Low –55.1
New Orders

ISM’s New Orders Index registered 67.8 percent in January, which is an increase of 5.8 percentage points when compared to the seasonally adjusted 62 percent reported in December. This is the 19th consecutive month of growth in the New Orders Index. A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

The 12 industries reporting growth in new orders in January — listed in order — are: Petroleum & Coal Products; Primary Metals; Computer & Electronic Products; Transportation Equipment; Wood Products; Machinery; Fabricated Metal Products; Miscellaneous Manufacturing; Chemical Products; Paper Products; Electrical Equipment, Appliances & Components; and Food, Beverage & Tobacco Products. The three industries reporting decreases in new orders in January are: Textile Mills; Plastics & Rubber Products; and Nonmetallic Mineral Products.

New
Orders
%
Better
%
Same
%
Worse
Net Index
Jan 2011 46 36 18 +28 67.8
Dec 2010 31 47 22 +9 62.0
Nov 2010 30 45 25 +5 59.6
Oct 2010 36 39 25 +11 59.9
Production

ISM’s Production Index registered 63.5 percent in January, which is an increase of 0.5 percentage point from the December reading of 63 percent (seasonally adjusted). An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures. This is the 20th consecutive month the Production Index has registered above 50 percent.

The 13 industries reporting growth in production during the month of January — listed in order — are: Petroleum & Coal Products; Computer & Electronic Products; Apparel, Leather & Allied Products; Wood Products; Primary Metals; Transportation Equipment; Miscellaneous Manufacturing; Fabricated Metal Products; Chemical Products; Food, Beverage & Tobacco Products; Paper Products; Electrical Equipment, Appliances & Components; and Machinery. The three industries reporting a decrease in production in January are: Textile Mills; Nonmetallic Mineral Products; and Plastics & Rubber Products.

Production %
Better
%
Same
%
Worse
Net Index
Jan 2011 40 44 16 +24 63.5
Dec 2010 30 52 18 +12 63.0
Nov 2010 26 54 20 +6 58.2
Oct 2010 37 49 14 +23 61.4

 

Employment

ISM’s Employment Index registered 61.7 percent in January, which is 2.8 percentage points higher than the seasonally adjusted 58.9 percent reported in December. This is the 16th consecutive month of growth in manufacturing employment. An Employment Index above 50.1 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, 11 reported growth in employment in January in the following order: Apparel, Leather & Allied Products; Wood Products; Petroleum & Coal Products; Primary Metals; Miscellaneous Manufacturing; Computer & Electronic Products; Nonmetallic Mineral Products; Fabricated Metal Products; Transportation Equipment; Machinery; and Food, Beverage & Tobacco Products. The two industries reporting a decrease in employment during January are: Chemical Products and Paper Products.

Employment %
Higher
%
Same
%
Lower
Net Index
Jan 2011 24 69 7 +17 61.7
Dec 2010 22 66 12 +10 58.9
Nov 2010 25 65 10 +15 59.0
Oct 2010 26 64 10 +16 57.9

 

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower in January as the Supplier Deliveries Index registered 58.6 percent, which is 1.9 percentage points higher than the 56.7 percent registered in December (seasonally adjusted). This is the 20th consecutive month the Supplier Deliveries Index has been above 50 percent. A reading above 50 percent indicates slower deliveries.

The eight industries reporting slower supplier deliveries in January — listed in order — are: Primary Metals; Furniture & Related Products; Machinery; Fabricated Metal Products; Transportation Equipment; Paper Products; Chemical Products; and Electrical Equipment, Appliances & Components. The three industries reporting faster deliveries in January are: Printing & Related Support Activities; Computer & Electronic Products; and Food, Beverage & Tobacco Products.

Supplier
Deliveries
%
Slower
%
Same
%
Faster
Net Index
Jan 2011 18 77 5 +13 58.6
Dec 2010 15 78 7 +8 56.7
Nov 2010 18 77 5 +13 58.1
Oct 2010 13 77 10 +3 52.3

 

Inventories

Manufacturers’ inventories grew for the seventh consecutive month in January, and at a slightly faster rate as the Inventories Index registered 52.4 percent. The index is 0.6 percentage point higher than the seasonally adjusted 51.8 percent reported in December. An Inventories Index greater than 42.7 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis’ (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

The nine industries reporting higher inventories in January — listed in order — are: Textile Mills; Apparel, Leather & Allied Products; Paper Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Machinery; Chemical Products; Computer & Electronic Products; and Fabricated Metal Products. The seven industries reporting decreases in inventories in January — listed in order — are: Primary Metals; Petroleum & Coal Products; Printing & Related Support Activities; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; and Transportation Equipment.

Inventories %
Higher
%
Same
%
Lower
Net Index
Jan 2011 25 54 21 +4 52.4
Dec 2010 24 52 24 0 51.8
Nov 2010 25 58 17 +8 56.1
Oct 2010 27 52 21 +6 53.2

 

Customers’ Inventories*

The ISM Customers’ Inventories Index registered 45.5 percent in January, 5.5 percentage points higher than in December when the index registered 40 percent. This is the 22nd consecutive month the Customers’ Inventories Index has been below 50 percent, indicating that respondents believe their customers’ inventories are too low at this time.

The three manufacturing industries reporting customers’ inventories as being too high during January are: Textile Mills; Apparel, Leather & Allied Products; and Food, Beverage & Tobacco Products. The eight industries reporting customers’ inventories as too low during January — listed in order — are: Nonmetallic Mineral Products; Plastics & Rubber Products; Printing & Related Support Activities; Transportation Equipment; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Machinery; and Chemical Products.

Customers’
Inventories
%
Reporting
%Too
High
%About
Right
%Too
Low
Net Index
Jan 2011 63 11 69 20 -9 45.5
Dec 2010 67 8 64 28 -20 40.0
Nov 2010 77 13 65 22 -9 45.5
Oct 2010 72 15 58 27 -12 44.0

 

Prices*

The ISM Prices Index registered 81.5 percent in January, 9 percentage points higher than the 72.5 percent reported in December and the highest reading since July 2008. This is the 19th consecutive month the Prices Index has registered above 50 percent. While 64 percent of respondents reported paying higher prices and 1 percent reported paying lower prices, 35 percent of supply executives reported paying the same prices as in December. A Prices Index above 49.4 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.

The 16 industries reporting paying increased prices during the month of January — listed in order — are: Textile Mills; Plastics & Rubber Products; Primary Metals; Food, Beverage & Tobacco Products; Fabricated Metal Products; Nonmetallic Mineral Products; Paper Products; Machinery; Transportation Equipment; Miscellaneous Manufacturing; Chemical Products; Electrical Equipment, Appliances & Components; Apparel, Leather & Allied Products; Wood Products; Printing & Related Support Activities; and Computer & Electronic Products. Furniture & Related Products is the only manufacturing industry reporting paying lower prices on average during January.

Prices %
Higher
%
Same
%
Lower
Net Index
Jan 2011 64 35 1 +63 81.5
Dec 2010 48 49 3 +45 72.5
Nov 2010 48 43 9 +39 69.5
Oct 2010 49 44 7 +42 71.0

 

Backlog of Orders*

ISM’s Backlog of Orders Index registered 58 percent in January, which is 11 percentage points higher than the 47 percent reported in December. Of the 83 percent of respondents who reported their backlog of orders, 34 percent reported greater backlogs, 18 percent reported smaller backlogs, and 48 percent reported no change from December.

The 10 industries reporting increased order backlogs in January — listed in order — are: Primary Metals; Apparel, Leather & Allied Products; Computer & Electronic Products; Machinery; Paper Products; Printing & Related Support Activities; Plastics & Rubber Products; Transportation Equipment; Fabricated Metal Products; and Chemical Products. The four industries reporting decreases in order backlogs during January are: Miscellaneous Manufacturing; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components.

Backlog of
Orders
%
Reporting
%
Greater
%
Same
%
Less
Net Index
Jan 2011 83 34 48 18 +16 58.0
Dec 2010 84 21 52 27 -6 47.0
Nov 2010 89 18 56 26 -8 46.0
Oct 2010 89 23 46 31 -8 46.0

 

New Export Orders*

ISM’s New Export Orders Index registered 62 percent in January, which is 7.5 percentage points higher than the 54.5 percent reported in December. This is the 19th consecutive month of growth in the New Export Orders Index.

The 11 industries reporting growth in new export orders in January — listed in order — are: Petroleum & Coal Products; Primary Metals; Apparel, Leather & Allied Products; Computer & Electronic Products; Machinery; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Transportation Equipment; Chemical Products; Food, Beverage & Tobacco Products; and Miscellaneous Manufacturing. The two manufacturing industries reporting a decrease in export orders during January are: Nonmetallic Mineral Products; and Plastics & Rubber Products.

New Export
Orders
%
Reporting
%
Higher
%
Same
%
Lower
Net Index
Jan 2011 81 30 64 6 +24 62.0
Dec 2010 81 21 67 12 +9 54.5
Nov 2010 81 23 68 9 +14 57.0
Oct 2010 82 30 61 9 +21 60.5

 

Imports*

Imports of materials by manufacturers continued to expand in January as the Imports Index registered 55 percent, which is 4.5 percentage points higher than the 50.5 percent reported in December. This is the 17th consecutive month of growth in imports.

The 10 industries reporting growth in imports during the month of January — listed in order — are: Wood Products; Primary Metals; Apparel, Leather & Allied Products; Printing & Related Support Activities; Paper Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; Transportation Equipment; and Machinery. The four industries reporting a decrease in imports during January are: Petroleum & Coal Products; Computer & Electronic Products; Miscellaneous Manufacturing; and Nonmetallic Mineral Products.

Imports %
Reporting
%
Higher
%
Same
%
Lower
Net Index
Jan 2011 82 20 70 10 +10 55.0
Dec 2010 82 13 75 12 +1 50.5
Nov 2010 83 18 70 12 +6 53.0
Oct 2010 83 15 73 12 +3 51.5

* The Backlog of Orders, Prices, Customers’ Inventories, Imports and New Export Orders Indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy

Average commitment lead time for Capital Expenditures remained unchanged at 105 days. Average lead time for Production Materials increased 5 days to 57 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies decreased 1 day to 27 days.

Percent Reporting
Capital
Expenditures
Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Jan 2011 28 9 14 13 27 9 105
Dec 2010 28 9 15 14 24 10 105
Nov 2010 33 7 13 15 22 10 101
Oct 2010 29 9 13 13 27 9 105
Production
Materials
Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Jan 2011 13 38 30 14 2 3 57
Dec 2010 16 39 26 13 5 1 52
Nov 2010 17 38 27 13 3 2 53
Oct 2010 19 33 28 13 4 3 57
MRO
Supplies
Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Jan 2011 50 36 9 3 1 1 27
Dec 2010 44 41 9 5 0 1 28
Nov 2010 52 37 8 2 1 0 22
Oct 2010 51 38 9 2 0 0 21

 

About this Report

The data presented herein is obtained from a survey of manufacturing supply managers based on information they have collected within their respective organizations. ISM makes no representation, other than that stated within this release, regarding the individual company data collection procedures. Use of the data is in the public domain and should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation

The Manufacturing ISM Report On Business® is based on data compiled from purchasing and supply executives nationwide. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies).

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers’ Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive).

The resulting single index number for those meeting the criteria for seasonal adjustments (PMI, New Orders, Production, Employment, Supplier Deliveries and Inventories) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The PMI is a composite index based on the seasonally adjusted diffusion indexes for five of the indicators with equal weights: New Orders, Production, Employment, Supplier Deliveries and Inventories.

Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A PMI reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI in excess of 42.5 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.5 percent, it is generally declining. The distance from 50 percent or 42.5 percent is indicative of the strength of the expansion or decline. With some of the indicators within this report, ISM has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis.

Responses to Buying Policy reflect the percent reporting the current month’s lead time, the approximate weighted number of days ahead for which commitments are made for Production Materials; Capital Expenditures; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted since there is no significant seasonal pattern.

The Manufacturing ISM Report On Business® is published monthly by the Institute for Supply Management™. The Institute for Supply Management™, established in 1915, is the largest supply management organization in the world as well as one of the most respected. ISM’s mission is to lead the supply management profession through its standards of excellence, research, promotional activities and education. This report has been issued by the association since 1931, except for a four-year interruption during World War II.

The full text version of the Manufacturing ISM Report On Business® is posted on ISM’s Web site at http://www.ism.ws on the first business day of every month after 10:10 a.m. (ET).

The next Manufacturing ISM Report On Business® featuring the February 2011 data will be released at 10:00 a.m. (ET) on Tuesday, March 1, 2011.

 








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